Indian Non-Basmati Rice Export Ban Stirs Global Market Concern, Despite Abundant U.S. Supply

Last month, India abruptly announced a ban on exporting non-basmati white rice, causing global supply anxieties and sparking panic-buying among some U.S. consumers. The sudden restriction has caused considerable disruption, especially for loyal consumers and importers of Indian-grown non-basmati varieties, including within the U.S.

However, the USA Rice Federation was quick to reassure American consumers, stating, “There’s enough U.S. rice to go around.” It highlighted that a significant portion of rice consumed in the U.S. is domestically produced, and this year’s yield has been satisfactory.

The Indian government implemented the ban on July 20 to lower rice prices domestically and secure availability within the country. Although the move has caused an upheaval in the international market, exports of parboiled and basmati rice are still permitted.

Tanner Ehmke, lead economist for grains and oilseeds at CoBank, noted that the ban “has sent the Asian market into a panic,” and there is rising concern about food inflation, especially across Asia. India is responsible for approximately 40% of the global rice trade. The countries most reliant on India’s rice exports include the Philippines, Malaysia, and Vietnam in Southeast Asia, and Nigeria, Ivory Coast, and Senegal in West Africa.

According to the International Food Policy Research Institute, the ban could increase global prices and exacerbate food insecurity. Rice prices have been rising due to devastating floods in Pakistan and potential impacts of the El Niño weather pattern.

The ban may be lifted if supply remains robust in India. However, its removal could flood the global market with Indian rice, leading to an “emotional over-correction,” as Ehmke put it.

In the U.S., rice farming conditions have improved significantly this year, increasing the attractiveness of rice over other crops like soybeans and corn, which have seen price drops. Peter Bachmann, vice president of policy and government affairs at USA Rice Federation, pointed out, “We’re looking to have a really healthy, robust U.S. rice crop.”

Despite the Indian ban affecting less than 2.5% of U.S. rice imports, distributors and shoppers dealing with specialty non-basmati Indian rice face significant challenges. Importers such as Arizona-based Deccan Foods, are grappling with disrupted supply chains, with the ban affecting both their businesses and customers.

While Indian grocery stores in the U.S. have reported instances of panic buying, they are assuring customers of finding alternative solutions to mitigate the situation. As the world watches India’s next moves, the ripple effects of its policy decision underline the interconnectedness of the global food market.